A policymaker at the Bank of England has warned that central banks may ‘encounter a few potholes’ as they wind down the stimulus measures that have provided extra support for their economies since the financial crisis.

In a speech last night, BoE deputy governor Charlie Bean said his fellow central bankers would face a tough challenge of communicating their intentions as the time approaches to wind down the stimulus measures that have provided extra support for their economies.

‘I do not expect central banks' collective management of the exit from the present exceptionally stimulatory monetary stance will be easy,’ he said. ‘The bottom line is that we may yet encounter a few potholes on the way to the exit.’

BoE policy: Charlie Bean's comments came ahead of the publication today of minutes from the May Bank of England Monetary Policy Committee meeting.

Bean, who is due to retire from the bank at the end of June also warned that current low volatility in financial markets is ’eerily reminiscent’ of the run-up to the financial crisis.

But he said that ‘the risk of major financial problems crystallising in the advanced countries should be much lower’ thanks to a combination of better-capitalised banks, lower leverage levels and more powers for regulators to deal with troubled lenders.

BoE Governor Mark Carney last week also said he expected volatility in financial markets would grow as the time came to return monetary policy to more normal levels.

Bean used his speech yesterday to explain the BoE's actions since the financial crisis, including its decision last year to start giving more explicit guidance on when it might start to raise interest rates.

‘Shorter-term market interest rates have moved higher since guidance was introduced, but no more so than is justified by a string of unexpectedly strong activity indicators,’ he said.

Bubble worry: BoE Governor Mark Carney on Sunday described the rapid rise in UK house prices as the biggest domestic threat to financial stability.

Bean also said that in future, the BoE's monetary policy and its macro policy for stemming financial stability risks might move in opposite directions.

Tighter policy for containing such risks could in principle help keep interest rates lower for longer and support the recovery, Bean said.

On Sunday BoE governor Mark Carney described the rapid rise in UK house prices - which are up around 10 percent over the year - as the biggest domestic threat to financial stability, and prime minister David Cameron agreed with Carney's view yesterday..

One worry for many economists is the government's Help to Buy scheme, which widens access to high loan-to-value mortgages and which the BoE is required to review in September.

Bean said the BoE would say before then if it believed the scheme was creating financial stability risks.

But he played down concerns, saying it only supported a relatively small number of mortgages, and was not responsible for the sharpest price rises which are concentrated in London.

‘People should keep it in perspective,’ he said. ‘The fundamental problem is not enough houses for the number of households,’ he added, echoing comments from Carney.

In principle, the scheme could continue even if the BoE required banks to tighten other mortgage lending, Bean added.

Mortgage lender Lloyds Banking Group said yesterday that it would limit mortgages to a maximum of four times a borrower's annual earnings when it is lending more than 500,000 pounds on a property.

Bean also said he opposed efforts to emulate the US Federal Reserve in publishing transcripts of future Bank of England Monetary Policy Committee meetings.

'I’m not personally a huge enthusiast for transcripts in general,’ he said, adding that it would damage the free flow of discussion and encourage policymakers to effectively read statements to each other.

Minutes from the May meeting of the MPC will be released today and will be scrutinised for any evidence of dissent on the decision to once again keep UK interest rates unchanged at record low levels of 0.5 per cent.

The Bank is not expected to raises interest rates at least until early next year in spite of concerns about an overheating housing market.

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